In what might be his last major public appearance before handing the reins to Janet Yellen in February, Bernanke explored the historical precedents for the Fed’s handling of the 2007-2009 financial crisis, largely defended Fed policy during and after the crisis, and thoughtfully looked at both the pros and cons of quantitative easing.

Among his more notable and quotable moments during his interview and Q&A session:

“Oh certainly, I had sleepless nights.” (And did not always see himself as the “Buddha,” a characterization by Tim Geithner.)

“We did the right thing, I hope.” (Referring overall to the actions of the Fed and noting that highly visible actions such as TARP, interest rate policy and coming to the aid of major financial institutions was also accompanied by much "under the radar" action not generally acknowledged. He also asserted that “over time” history will hopefully come to understand that Fed policy was meant to benefit “the average American.”)

“I give President Bush a lot of credit.” (Primarily for “giving us support and leeway” and “making some unpopular political decisions” which were in the nation’s best interests.)

Hank Paulson, Geithner and Bernanke: “had a common purpose and a very strong partnership…we were quite complementary,” though “we did have our points of discussion.”

“A Senator during the heat of the crisis told me his constituent calls on TARP were running 50/50: 50% said NO, 50% said HELL NO.”

“The great majority of academic studies show it (QE) to be at least somewhat effective.”

“We feel we can control the downside risks that people talk about (related to QE).” (Citing the threats of “inflationary pressures,” potential “capital losses” for the Fed, and “financial instability” risks. He pointedly noted that the Fed has delivered significant funds to the Treasury over the past few years.)

“It’s bad luck to make any market predictions, but valuations are broadly within historical ranges.” (Addressing the notion that the Fed has created an asset bubble.)

“Although the financial crisis had long-lasting and important effects, I do not believe they are truly permanent.” (While acknowledging that unemployment, the lack of productivity growth, and a slower pace of innovation are concerns of his and he is not entirely sure of the answers.)

And in a joking and somewhat inside baseball reference, “The problem with QE, it works in practice, but it does not work in theory.” (In explaining that while QE mainly relies on “a basic monetarist principle” of “swapping liquid assets for non-liquid assets” and has some historical precedents, the Fed was relying to some degree on untested academic research and ideas from “our own experiments.” Bernanke added that despite public perception of the internal discussion and voting, “I don’t think a large number of people on the (FOMC) committee feel that it (QE) is inherently not effective.”)

Bernanke’s comments, while getting a fair amount of financial media play, did not seem on the surface to be a market driver this week. Many market observers were left scratching their heads on what exactly the market thought of the New Year, with one of the deepest market drops of the past few months on Monday, followed up Wednesday by yet another new all-time high for the S&P 500.

Goldman Sachs seemed to be sending out its own mixed signals, with reports Monday of a market note by GS chief strategist David Kostin that the S&P 500 index’s valuation is “lofty by almost any measure.”(MarketWatch) Kostin, however, still has a year-end target for the S&P of 1900, up about 3%, with further market gains to be defined by “profit growth rather than P/E expansion.”

This was followed by reports of another Goldman department, this one the private wealth group, telling well-heeled clients in a note to "stay fully invested at their strategic allocation to U.S. equities." (BusinessInsider) The note was reportedly generally bullish and cautioned that "the penalty of being wrong when underweighting US equities are very high." But the same note acknowledged that this was “a nuanced recommendation” and they were advocating, "extra vigilance, knowing that the summit is in sight."